so would it better for me to get a loan for X amount instead of using my own cash funds or is it irrelevant until i take a salary from the company?This is an area which needs a Key Post
I have seen people taking large taxable salaries from their companies while they have big loans to the company. In fact, I have seen such companies go into liquidation owing the money to the directors. It would have made sense to repay the loans before paying the salary.
Lending money to a company is a good way to finance a company. If the director has to personally borrow the money e.g. remortgage the home, the director can set the interest on the personal loan against his taxable income.
Bear in mind that if the company is getting into financial difficulty and you repay the loan, it could be regarded as preferential treatment of creditors.
what so you mean by "Whether you use your cash or whether you borrow is a much bigger issue."Whether you use your cash or whether you borrow is a much bigger issue.
However, if you do borrow, for working capital, then you can get tax relief on it.
If you have borrowings for lending to the company and for, say, a car loan, you should repay the car loan first as you get no tax relief on those borrowings.